10-Q 1 form10q.htm QUARTERLY REPORT

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

☑  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

OR
☐  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___  to  ___.

Commission file number:  1-14323

ENTERPRISE PRODUCTS PARTNERS L.P.
(Exact Name of Registrant as Specified in Its Charter)

Delaware
 
76-0568219
(State or Other Jurisdiction of Incorporation or Organization)
 
(I.R.S. Employer Identification No.)
 
1100 Louisiana Street, 10th Floor
Houston, Texas 77002
    (Address of Principal Executive Offices, including Zip Code)
(713) 381-6500
(Registrant’s Telephone Number, including Area Code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of Each Class
Trading Symbol(s)
Name of Each Exchange On Which Registered
Common Units
EPD
New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes ☑  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☑   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☑
Accelerated filer ☐
Non-accelerated filer   ☐
Smaller reporting company ☐
Emerging growth company   ☐
  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐   

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes ☐   No ☑ 

There were 2,182,129,957 common units of Enterprise Products Partners L.P. outstanding at the close of business on October 31, 2021. 
ENTERPRISE PRODUCTS PARTNERS L.P.
TABLE OF CONTENTS

 
 
Page No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  

PART I.  FINANCIAL INFORMATION.

ITEM 1.  FINANCIAL STATEMENTS.

ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)

   
September 30,
2021
    
December 31,
2020
  
ASSETS
            
Current assets:
            
Cash and cash equivalents
  
$
2,213.5
    
$
1,059.9
  
Restricted cash
    
144.6
      
98.2
  
Accounts receivable – trade, net of allowance for credit losses
of $50.0 at September 30, 2021 and $46.5 at December 31, 2020
    
6,119.5
      
4,802.6
  
Accounts receivable – related parties
    
3.0
      
5.6
  
Inventories (see Note 3)
    
3,095.9
      
3,303.5
  
Derivative assets (see Note 13)
    
694.9
      
228.6
  
Prepaid and other current assets
    
557.0
      
411.0
  
Total current assets
    
12,828.4
      
9,909.4
  
Property, plant and equipment, net (see Note 4)
    
42,253.8
      
41,912.8
  
Investments in unconsolidated affiliates (see Note 5)
    
2,433.4
      
2,429.2
  
Intangible assets, net (see Note 6)
    
3,190.0
      
3,309.1
  
Goodwill (see Note 6)
    
5,448.9
      
5,448.9
  
Other assets
    
1,165.4
      
1,097.3
  
Total assets
  
$
67,319.9
    
$
64,106.7
  
 
                
LIABILITIES AND EQUITY
                
Current liabilities:
                
Current maturities of debt (see Note 7)
  
$
1,399.3
    
$
1,325.0
  
Accounts payable – trade
    
708.1
      
704.6
  
Accounts payable – related parties
    
124.7
      
149.5
  
Accrued product payables
    
7,997.1
      
5,395.4
  
Accrued interest
    
225.2
      
455.6
  
Derivative liabilities (see Note 13)
    
770.1
      
349.2
  
Other current liabilities
    
646.2
      
608.7
  
Total current liabilities
    
11,870.7
      
8,988.0
  
Long-term debt (see Note 7)
    
28,132.8
      
28,540.7
  
Deferred tax liabilities (see Note 15)
    
511.3
      
464.7
  
Other long-term liabilities
    
771.2
      
686.6
  
Commitments and contingent liabilities (see Note 16)
    
     
 
Redeemable preferred limited partner interests: (see Note 8)
                
    Series A cumulative convertible preferred units (“preferred units”)
        (50,412 units outstanding at September 30, 2021 and 50,138 units outstanding
         at December 31, 2020)
    
49.3
      
49.3
  
Equity: (see Note 8)
                
Partners’ equity:
                
Common limited partner interests (2,182,129,957 units issued and outstanding at
     September 30, 2021, 2,182,308,958 units issued and outstanding at December 31, 2020)
    
26,390.3
      
25,766.6
  
Treasury units, at cost
    
(1,297.3
)
    
(1,297.3
)
Accumulated other comprehensive loss
    
(171.8
)
    
(165.2
)
Total  partners’ equity
    
24,921.2
      
24,304.1
  
Noncontrolling interests in consolidated subsidiaries
    
1,063.4
      
1,073.3
  
Total equity
    
25,984.6
      
25,377.4
  
Total liabilities, preferred units, and equity
  
$
67,319.9
    
$
64,106.7
  


See Notes to Unaudited Condensed Consolidated Financial Statements.
ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
 (Dollars in millions, except per unit amounts)

 
  
For the Three Months
Ended September 30,
    
For the Nine Months
Ended September 30,
  
 
  
2021
    
2020
    
2021
    
2020
  
Revenues:
                        
Third parties
  
$
10,800.4
    
$
6,914.5
    
$
29,382.2
    
$
20,126.3
  
Related parties
    
30.9
      
7.5
      
54.5
      
29.2
  
Total revenues (see Note 9)
    
10,831.3
      
6,922.0
      
29,436.7
      
20,155.5
  
Costs and expenses:
                                
Operating costs and expenses:
                                
Third party and other costs
    
9,068.1
      
5,288.2
      
24,063.9
      
15,087.4
  
Related parties
    
340.4
      
283.0
      
964.7
      
914.5
  
Total operating costs and expenses
    
9,408.5
      
5,571.2
      
25,028.6
      
16,001.9
  
General and administrative costs:
                                
Third party and other costs
    
16.4
      
16.3
      
56.6
      
63.1
  
Related parties
    
30.9
      
34.0
      
98.5
      
99.7
  
Total general and administrative costs
    
47.3
      
50.3
      
155.1
      
162.8
  
Total costs and expenses (see Note 10)
    
9,455.8
      
5,621.5
      
25,183.7
      
16,164.7
  
Equity in income of unconsolidated affiliates
    
137.6
      
82.0
      
447.2
      
336.1
  
Operating income
    
1,513.1
      
1,382.5
      
4,700.2
      
4,326.9
  
Other income (expense):
                                
Interest expense
    
(315.9
)
    
(320.5
)
    
(954.8
)
    
(958.2
)
Change in fair market value of Liquidity Option
    
–
      
–
      
–
      
(2.3
)
Interest income
    
0.9
      
2.2
      
2.7
      
12.3
  
Other, net
    
0.1
      
0.7
      
(0.1
)
    
2.5
  
Total other expense, net
    
(314.9
)
    
(317.6
)
    
(952.2
)
    
(945.7
)
Income before income taxes
    
1,198.2
      
1,064.9
      
3,748.0
      
3,381.2
  
Benefit from (provision for) income taxes (see Note 15)
    
(16.1
)
    
19.1
      
(57.3
)
    
138.6
  
Net income
    
1,182.1
      
1,084.0
      
3,690.7
      
3,519.8
  
Net income attributable to noncontrolling interests
    
(28.3
)
    
(31.4
)
    
(82.3
)
    
(82.4
)
Net income attributable to preferred units
    
(0.8
)
    
–
*
    
(2.7
)
    
–
*
Net income attributable to common unitholders
  
$
1,153.0
    
$
1,052.6
    
$
3,605.7
    
$
3,437.4
  
 
                                
*Amount is negligible
                                
                                 
Earnings per unit: (see Note 11)
                                
Basic and diluted earnings per common unit
  
$
0.52
    
$
0.48
    
$
1.64
    
$
1.56
  













See Notes to Unaudited Condensed Consolidated Financial Statements.

ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED
COMPREHENSIVE INCOME
(Dollars in millions)

 
  
For the Three Months
Ended September 30,
    
For the Nine Months
Ended September 30,
  
 
  
2021
    
2020
    
2021
    
2020
  
 
                        
Net income
  
$
1,182.1
    
$
1,084.0
    
$
3,690.7
    
$
3,519.8
  
Other comprehensive income (loss):
                                
Cash flow hedges: (see Note 13)
                                
Commodity hedging derivative instruments:
                                
Changes in fair value of cash flow hedges
    
(100.6
)
    
(4.2
)
    
(852.2
)
    
392.7
  
Reclassification of losses (gains) to net income
    
117.1
      
29.5
      
633.8
      
(334.8
)
Interest rate hedging derivative instruments:
                                
Changes in fair value of cash flow hedges
    
–
      
62.6
      
182.9
      
(207.7
)
Reclassification of losses to net income
    
10.3
      
9.9
      
29.1
      
29.2
  
Total cash flow hedges
    
26.8
      
97.8
      
(6.4
)
    
(120.6
)
Other
    
0.1
      
–
      
(0.2
)
    
(0.1
)
Total other comprehensive income (loss)
    
26.9
      
97.8
      
(6.6
)
    
(120.7
)
Comprehensive income
    
1,209.0
      
1,181.8
      
3,684.1
      
3,399.1
  
Comprehensive income attributable to noncontrolling interests
    
(28.3
)
    
(31.4
)
    
(82.3
)
    
(82.4
)
Comprehensive income attributable to preferred units
    
(0.8
)
    
–
*
    
(2.7
)
    
–
*
Comprehensive income attributable to common unitholders
  
$
1,179.9
    
$
1,150.4
    
$
3,599.1
    
$
3,316.7
  
  
*Amount is negligible


























See Notes to Unaudited Condensed Consolidated Financial Statements.


ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(Dollars in millions)

 
  
For the Nine Months
Ended September 30,
  
 
  
2021
    
2020
  
Operating activities:
            
Net income
  
$
3,690.7
    
$
3,519.8
  
Reconciliation of net income to net cash flows provided by operating activities:
                
Depreciation and accretion
    
1,281.0
      
1,262.6
  
Amortization of intangible assets
    
113.3
      
109.3
  
Amortization of major maintenance costs for reaction-based plants
    
19.0
      
–
  
Other amortization expense
    
180.4
      
173.2
  
Impairment of assets other than goodwill (see Note 4)
    
112.9
      
90.4
  
Equity in income of unconsolidated affiliates
    
(447.2
)
    
(336.1
)
Distributions received from unconsolidated affiliates attributable to earnings
    
405.9
      
337.4
  
Net losses (gains) attributable to asset sales and related matters
    
8.4
      
(2.1
)
Deferred income tax expense (benefit)
    
33.1
      
(149.0
)
Change in fair market value of derivative instruments
    
(86.3
)
    
(53.7
)
Change in fair market value of Liquidity Option
    
–
      
2.3
  
Non-cash expense related to long-term operating leases (see Note 16)
    
29.5
      
29.6
  
Net effect of changes in operating accounts (see Note 17)
    
1,047.1
      
(692.0
)
Other operating activities
    
(0.5
)
    
(0.1
)
Net cash flows provided by operating activities
    
6,387.3
      
4,291.6
  
Investing activities:
                
Capital expenditures
    
(1,805.7
)
    
(2,671.6
)
Investments in unconsolidated affiliates
    
(1.3
)
    
(9.9
)
Distributions received from unconsolidated affiliates attributable to the return of capital
    
41.2
      
124.9
  
Proceeds from asset sales
    
58.1
      
8.4
  
Other investing activities
    
(13.8
)
    
(16.0
)
Cash used in investing activities
    
(1,721.5
)
    
(2,564.2
)
Financing activities:
                
Borrowings under debt agreements
    
11,158.5
      
6,672.1
  
Repayments of debt
    
(11,491.8
)
    
(4,406.6
)
Debt issuance costs
    
(15.1
)
    
(46.3
)
Monetization of interest rate derivative instruments
    
75.2
      
(33.3
)
Cash distributions paid to common unitholders (see Note 8)
    
(2,948.5
)
    
(2,919.6
)
Cash payments made in connection with distribution equivalent rights
    
(23.1
)
    
(20.0
)
Cash distributions paid to noncontrolling interests
    
(115.1
)
    
(97.8
)
Cash contributions from noncontrolling interests
    
23.0
      
21.2
  
Repurchase of common units under 2019 Buyback Program (see Note 8)
    
(88.8
)
    
(173.8
)
Net cash proceeds from the issuance of preferred units
    
–
      
32.5
  
Other financing activities
    
(40.1
)
    
(34.7
)
Cash used in financing activities
    
(3,465.8
)
    
(1,006.3
)
Net change in cash and cash equivalents, including restricted cash
    
1,200.0
      
721.1
  
Cash and cash equivalents, including restricted cash, at beginning of period
    
1,158.1
      
410.0
  
Cash and cash equivalents, including restricted cash, at end of period
  
$
2,358.1
    
$
1,131.1
  







See Notes to Unaudited Condensed Consolidated Financial Statements.

ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED EQUITY
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021
(Dollars in millions)

 
  
Partners’ Equity
              
   
Common
Limited
Partner
Interests
    
Treasury
Units
    
Accumulated
Other
Comprehensive
Income (Loss)
    
Noncontrolling
Interests in
Consolidated
Subsidiaries
    
Total
  
For the Three Months Ended September 30, 2021:
                              
     Balance, June 30, 2021
  
$
26,268.8
    
$
(1,297.3
)
  
$
(198.7
)
  
$
1,074.0
    
$
25,846.8
  
   Net income
    
1,153.0
      
–
      
–
      
28.3
      
1,181.3
  
   Cash distributions paid to common unitholders
    
(983.5
)
    
–
      
–
      
–
      
(983.5
)
   Cash payments made in connection with
      distribution equivalent rights
    
(7.9
)
    
–
      
–
      
–
      
(7.9
)
   Cash distributions paid to noncontrolling interests
    
–
      
–
      
–
      
(43.7
)
    
(43.7
)
   Cash contributions from noncontrolling interests
    
–
      
–
      
–
      
4.9
      
4.9
  
   Amortization of fair value of equity-based awards
    
35.1
      
–
      
–
      
–
      
35.1
  
   Repurchase and cancellation of common units under
      2019 Buyback Program (see Note 8)
    
(74.9
)
    
–
      
–
      
–
      
(74.9
)
   Cash flow hedges
    
–
      
–
      
26.8
      
–
      
26.8
  
   Other, net
    
(0.3
)
    
–
      
0.1
      
(0.1
)
    
(0.3
)
     Balance, September 30, 2021
  
$
26,390.3
    
$
(1,297.3
)
  
$
(171.8
)
  
$
1,063.4
    
$
25,984.6
  



 
  
Partners’ Equity
              
   
Common
Limited
Partner
Interests
    
Treasury
Units
    
Accumulated
Other
Comprehensive
Income (Loss)
    
Noncontrolling
Interests in
Consolidated
Subsidiaries
    
Total
  
For the Nine Months Ended September 30, 2021:
                              
     Balance, December 31, 2020
  
$
25,766.6
    
$
(1,297.3
)
  
$
(165.2
)
  
$
1,073.3
    
$
25,377.4
  
   Net income
    
3,605.7
      
–
      
–
      
82.3
      
3,688.0
  
   Cash distributions paid to common unitholders
    
(2,948.5
)
    
–
      
–
      
–
      
(2,948.5
)
   Cash payments made in connection with
      distribution equivalent rights
    
(23.1
)
    
–
      
–
      
–
      
(23.1
)
   Cash distributions paid to noncontrolling interests
    
–
      
–
      
–
      
(115.1
)
    
(115.1
)
   Cash contributions from noncontrolling interests
    
–
      
–
      
–
      
23.0
      
23.0
  
   Amortization of fair value of equity-based awards
    
114.6
      
–
      
–
      
–
      
114.6
  
   Repurchase and cancellation of common units under
      2019 Buyback Program (see Note 8)
    
(88.8
)
    
–
      
–
      
–
      
(88.8
)
   Cash flow hedges
    
–
      
–
      
(6.4
)
    
–
      
(6.4
)
   Other, net
    
(36.2
)
    
–
      
(0.2
)
    
(0.1
)
    
(36.5
)
     Balance, September 30, 2021
  
$
26,390.3
    
$
(1,297.3
)
  
$
(171.8
)
  
$
1,063.4
    
$
25,984.6
  














See Notes to Unaudited Condensed Consolidated Financial Statements.  For information regarding Unit History and
Accumulated Other Comprehensive Income (Loss), see Note 8.
ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED EQUITY
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020
(Dollars in millions)

 
  
Partners’ Equity
              
   
Common
Limited
Partner
Interests
    
Treasury
Units
    
Accumulated
Other
Comprehensive
Income (Loss)
    
Noncontrolling
Interests in
Consolidated
Subsidiaries
    
Total
  
For the Three Months Ended September 30, 2020:
                              
     Balance, June 30, 2020
  
$
26,321.1
    
$
(1,297.3
)
  
$
(147.1
)
  
$
1,064.7
    
$
25,941.4
  
   Net income
    
1,052.6
      
–
      
–
      
31.4
      
1,084.0
  
   Cash distributions paid to common unitholders
    
(972.7
)
    
–
      
–
      
–
      
(972.7
)
   Cash payments made in connection with
      distribution equivalent rights
    
(7.1
)
    
–
      
–
      
–
      
(7.1
)
   Cash distributions paid to noncontrolling interests
    
–
      
–
      
–
      
(36.0
)
    
(36.0
)
   Cash contributions from noncontrolling interests
    
–
      
–
      
–
      
1.5
      
1.5
  
   Amortization of fair value of equity-based awards
    
39.5
      
–
      
–
      
–
      
39.5
  
   Repurchase and cancellation of common units under
      2019 Buyback Program (see Note 8)
    
(33.7
)
    
–
      
–
      
–
      
(33.7
)
   Common units exchanged for preferred units, with common units received being immediately cancelled
    
(17.5
)
    
–
      
–
      
–
      
(17.5
)
   Cash flow hedges
    
–
      
–
      
97.8
      
–
      
97.8
  
   Other, net
    
(0.3
)
    
–
      
–
      
7.8
      
7.5
  
     Balance, September 30, 2020
  
$
26,381.9
    
$
(1,297.3
)
  
$
(49.3
)
  
$
1,069.4
    
$
26,104.7
  



 
  
Partners’ Equity
              
   
Common
Limited
Partner
Interests
    
Treasury
Units
    
Accumulated
Other
Comprehensive
Income (Loss)
    
Noncontrolling
Interests in
Consolidated
Subsidiaries
    
Total
  
For the Nine Months Ended September 30, 2020:
                              
     Balance, December 31, 2019
  
$
24,692.6
    
$
–
    
$
71.4
    
$
1,063.5
    
$
25,827.5
  
   Net income
    
3,437.4
      
–
      
–
      
82.4
      
3,519.8
  
   Cash distributions paid to common unitholders
    
(2,919.6
)
    
–
      
–
      
–
      
(2,919.6
)
   Cash payments made in connection with
      distribution equivalent rights
    
(